Senior citizens constitute one of the most financially vulnerable segments of the population not only in India but all over the world. A recent report by NGO HelpAge stated that 29% – in other words, less than one-third – of senior citizens have the benefit of old-age pensions, provident funds, or social security schemes.
The implication is easy to understand. Senior citizens have all the more reason to seek higher returns from FDs since it is one of the most stable sources of income for them. However, it is incumbent upon senior citizens to simultaneously ensure the safety of the funds.
One of the notions that many labour under is that FDs are issued only by banks. Bank FDs are certainly the most common, but they are not the only ones available in the market. They are also not the only safe FDs.
NBFCs and HFCs
Apart from banks, post offices, NBFCs (non-banking finance companies) and some corporates issue FDs, providing investors with a wide array of debt instruments that can suit different types of financial objectives and risk profiles.
Corporate FDs are mainly issued NBFCs and HFCs (housing finance companies). These fixed deposits generally bear higher rates of interest than bank FDs.
Bajaj Finance senior citizen FD rate
One of the most prominent NBFCs in India, Bajaj Finance, offers up to 8.85% interest rate on a wide array of deposits – from Rs 15,000 to Rs 5 crore. The tenure is 42 months or three-and-a-half years.
While these are available through the company’s website and app, regular FDs carry an interest rate of 8.5%. The tenure is between 1 year and 5 years.
This NBFC offers additional interest rates, up to 40 basis points, for FDs done by senior citizens.
These FDs are rated AAA/stable by rating majors Crisil and ICRA.
Shriram Finance senior citizen FD rate
The rate of interest in FDs issued for senior citizens by housing finance major Shriram Finance goes within kissing distance of 9%. The FDs for general customers bear an interest rate of 8.47%. The company pays 50 basis points on FDs for senior citizens taking it to 8.97% interest rate on 5-year FD.
Shriram Finance also issues FDs for 1 year, 3 years and 5 years. The rates applicable to 3-year FDs are 8.38% (general public) and 8.88% (senior citizens).
The rate goes down to 7.09% and 7.59% for non-senior and senior citizens respectively.
Shriram Finance enjoys a credit rating of AA+/Stable by ICRA and IND AA+/Stable by India Ratings and Research.
Sundaram Home Finance senior citizen FD rate
Sundaram Home Finance FDs offer the highest rate of interest of 8.25% for those above 60 years. It is available for an FD carrying a tenure of 5 years. The annual rate of interest for senior citizens for 2, 3 and 4-year FDs too carry the same rate of interest. But if the tenure is that of 1 year, the rate drops to 7.95%.
Both Crisil and ICRA have assigned AAA/Stable credit rating to this instrument which is of the highest order. Instruments with this rating have the least credit risk and indicate timely payment of interest and principal.
Muthoot Capital senior citizen FD rate
The name of Muthoot Capital is synonymous with gold loans. However, an NBFC, Muthoot Capital, issues FDs for the general public too.
The interest rates of this company vary between 7.71% to 8.88% for senior citizens. For those under 60, the rates move between 7.21% and 8.38%.
If the tenure of the FD is 1 year the rate of interest is 7.21%, while an FD between 1 year 1 day and 2 years bears interest of 7.77%. FDs between 2 years 1 day and 3 years fetch interest of 8.07% while the 4-year and 5-year FDs bear interest of 7.96% and 8.38% respectively.
The company also offers FDs that offer monthly interest payments.
The instrument enjoys an A+/Stable credit rating by Crisil that signals adequate safety and satisfactory assurance on timely payment of interest and principal.
However, it must be remembered that apart from senior citizens, risk-averse younger investors, too, constantly are on the lookout for higher interest rates on fixed deposits.
Some corporates issue FDs that offer higher interest rates than most banks. Senior citizens can consider these for earning more – FD schemes of Bajaj Finance, Shriram Finance, Sundaram Home Finance, Muthoot Capital. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
